Boardroom gender diversity and dividend payout strategies: effects of mergers deals

Abstract

Our study examines the effects of mergers and acquisitions deals on the relationship between female leadership and dividend strategies for 90 UK listed firms during the period 2006–2016. Results indicate that firms with a larger proportion of female directors serving on the board are more likely to pay higher dividends, but this positive finding is weaker when the firms experienced a higher number of mergers and acquisitions deals. Interestingly, extended analyses on female directors' positions show the opposing effects of female Chairmen and female CEOs on a firm's payout strategies. Although a female Chairman is associated with higher dividend payout levels, a female CEO shows an adverse impact. Yet these results tend to be reversed for firms with more merger and acquisition transactions. Our findings make a significant contribution to a trendy but relatively limited and inconclusive topic that links gender diversity to scrutiny intensity.